Senate Panel OKs 1 Percent Pay Raise for Troops and Defense Civilians

By Kellie Lunney

July 28, 2014

A Senate panel has approved legislation that provides a smaller pay raise for military service members than the one the House agreed to.

The Appropriations Committee reported out the fiscal 2015 Defense spending bill, which includes a 1 percent pay boost for troops and Defense Department civilians next year – the same amount that President Obama has recommended and the Senate Armed Services Committee authorized when it approved its bill. The 1 percent pay raise supported by the Obama administration and the Democratic Senate, however, is at odds with the 1.8 percent boost the House tacitly supported for service members in June when it passed its version of the fiscal 2015 Defense spending bill.

If the Senate ultimately passes a bill with the 1 percent raise, the two chambers will have to hammer out their differences in conference committee. Military service members received a 1 percent pay boost in 2014.

The formula for determining service members’ annual pay increase is based on the Bureau of Labor Statistics’ Employment Cost Index and the growth in private-sector wages. The 1.8 percent pay bump for troops is in line with the automatic fiscal 2015 cost-of-living adjustment scheduled for the military; there is not an explicit provision regarding a pay raise in the House legislation, but by staying silent, lawmakers are supporting the amount that would automatically take place under the law. However, the law (Title 37, Chapter 19, Section 1009) also gives the president the authority to set an alternate pay raise for military personnel, citing a national emergency or fiscal concerns, if Congress doesn’t pass legislation adjusting the amount or canceling it. The 1990 Federal Employees Pay Comparability Act allows the president through executive order to set a pay raise for federal civilian employees under the same circumstances.

The $549.3 billion Senate defense spending bill, which includes $128.4 billion for military personnel, “also follows through on Congress’ reversal of the cost-of-living adjustment reduction by adding $507.5 million to fully fund military retirement benefits,” said a July 17 statement from the committee outlining the legislation’s major provisions. Congress in February repealed a provision in the 2013 Bipartisan Budget Act that cut the pensions of working-age military retirees until they reach the age of 62.

The Senate legislation also calls for a pay freeze for general and flag officers in fiscal 2015, as recommended by the Obama administration, and approved other personnel-related White House recommendations, including a provision that results in a smaller increase for troops’ basic housing allowance over time and higher pharmacy co-pays from 2015 through 2024 for non-active duty TRICARE beneficiaries.

The committee also approved requests for additional intelligence and cyber-related positions, but called for a $20 million reduction to management headquarters for the Office of the Defense secretary. “This is a 5 percent reduction in personnel funding to ensure that the Office of the Secretary of Defense be included in the targeted savings goal of 20 percent of management headquarters funding by 2019,” the committee statement said.

The panel rejected more aggressive White House recommendations related to TRICARE, such as creating enrollment fees for TRICARE-for-Life beneficiaries. Like their House colleagues, senators on the Appropriations Committee also rejected the administration’s recommendations to cut funding of military commissaries, the heavily-subsidized stores on base where service members and their families buy food and other goods. The Senate bill restores $200 million to maintain operations at military commissaries; the House version restores half of that amount to the stores. Another $3 million would go to a health base initiative, designed to promote wellness practices for troops and their families living on base.

The House has passed seven fiscal 2015 spending bills to date; the Senate has not passed any yet.